Immobiliare Grande Distribuzione SIIQ S.p.A. · MIL:IGD
Immobiliare Grande Distribuzione SIIQ — IGD SIIQ — Non-Deal Roadshow (November 2010)
47 slides from Immobiliare Grande Distribuzione SIIQ's roadshow presentation, Nov 18, 2010
Slide 1: Roadshow Presentation
Roadshow Presentation Paris, 18-19 November 2010
Slide 2: Disclaimer
2 Disclaimer This presentation contains forwards-looking information and statements about IGD SIIQ SPA and its Group. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements reg
Slide 3: Index
Index IGD Company profile 5 2010 3Q Results 13 Approved by BoD on 11 November 2010 Review of the BP 2009-2013 25 Approved by BoD on 11 November 2010 November 2010
Slide 4: Agenda
4 Agenda COMPANY PROFILE 2010 3Q Results REVIEW OF THE 2009-2013 BUSINESS PLAN November 2010
Slide 5: Group Structure
5 Group Structure 100% 100% Immobiliare Millennium Larice Gallery 15% 100% 60%(*) 50% Iniziative WinMagazine Bologna Nord 100% 100% 100% WinManagement RGD GestioniSrl New Mall Srl (*) Porta Medicea is 80% consolidated on the back of the Put&Call option on the 20% minority stake. November 2010
Slide 6: Governance and Shareholders
6 Governance and Shareholders IGD BOARD OF DIRECTORS: Board of Directors was Lead Related-parties renewed by the AGM on Audit Nom ination Com pensantion Non-executive Executive Indipendent Com m itte Com m ittee Com m ittee Independent Transaction 23 April, 2009 Director Com m itteee Gilberto Coffar
Slide 7: A unique portfolio in Italy
7 A unique portfolio in Italy FREEHOLD PROPERTIES REGIONS WITH IGD PRESENCE: 11 Lombardy Trentino MARKET VALUE 3 Shopping Malls 1 Shopping mall as of 30 June 2010 ( o/w 1 RGD) (including RGD): Veneto Piedmont 1,593.06 mn € 3 Shopping Malls 1 Plot of land (o/w1 RGD) 1 Shopping mall opening soon 1 Ret
Slide 8: Winmarkt's Portfolio
8 Winmarkt’s Portfolio PRESENCE IN ROMANIA IN 13 MEDIUM-SIZED CITIES MARKET VALUE as of 30 June 2010: 183.8 mn € FREEHOLD PROPERTIES: 15 SHOPPING MALLS 1 OFFICE BUILDING SHOPPING MALLS’ YIELD: 8.34% AVG. OCCUPANCY: 77% November 2010
Slide 9: Breakdown of the portfolio's market value and revenues
Breakdown of the portofolio’s market value and revenues Breakdown by type of the portfolio’s Breakdown by type of the revenues at market value at 30 June 2010 30 September 2010 0,18% 11,61% 4,05% 26,27% 10,30% 0,14% 26,30% 49,70% 61,94% ROMANIA GALLERIA IPER ALTRO RGD ROMANIA GALLERIA IPER ALTRO Geo
Slide 10: Main lease terms
10 Main lease terms for: ITALIAN SHOPPING MALLS ITALIAN HYPERMARKETS ROMANIAN SHOPPING MALLS Average maturity: Average maturity: Average maturity: Lease agreement of the going concern: 18 years + 6 years 2 years for local tenants 6 years + 6 Rents’ indexation: 5 years for national tenants rental agr
Slide 11: Next openings
11 Next openings Shopping mall Shopping mall LA TORRE CONE’ Palermo, Sicily Conegliano (Treviso), Veneto Opening date: 23 November 2010 Opening date: 25 November 2010 Investment: 55 mn € Investment: 72.2 mn € GLA of the shopping mall: 12,758 sqm GLA of the shopping mall: 11,900 sqm Location: Sicily,
Slide 12: Agenda
12 Agenda COMPANY PROFILE 2010 3QResults REVIEW OF THE 2009-2013 BUSINESS PLAN November 2010
Slide 13: Highlights
Highlights Q32010 2010vs vsQ3 Q32009 2009 Q3 13 Revenues: 84,017 €/000 + 0.03% Ebitda: 59,984 €/000 + 6.9% Ebitda Margin: 71.4% + 4.6 percentage points Profit before taxes: 25,612 €/000 + 50.9% Net Profit: 22,648 €/000 + 54.0% FFO: 31,863 €/000 + 14.3% November 2010
Slide 14: Net profit: + 54.0%
Net profit: + 54.0% NET PROFIT (€ mn) 25,000 + 54.0% 22,648 20,000 15,000 14,707 10,000 5,000 0 30-sept-09 30-sept-10 NET PROFIT EVOLUTION (€ mn) 4,914 124 739 42 3,848 22,648 14,707 3Q09 Change in Change in Change in Change in Change in 3Q10 Net Profit Ebitda Depreciation & financial taxes losses r
Slide 15: Reclassified Income Statement
Reclassified Income Statement €/000 2009 3Q 2010 3Q ∆ % Revenues from freehold properties 72.470 74.496 2.026 2,79% Revenues from leasehold properties 6.547 6.118 (429) (6,56%) Revenues from services 4.849 3.282 (1.567) (32,31%) Different revenues 123 121 (2) (1,71%) Operating Revenues 83.989 84.017
Slide 16: Revenues: +0.03%
Revenues: +0.03% TOTAL REVENUES (€ mn) 86,000 123 121 84,000 82,000 3,282 4,849 80,000 Other revenues 78,000 6,118 Revenues from services 76,000 6,547 Revenues from leashold properties 74,000 Revenues from freehold properties Rental revenues 72,000 70,000 74,496 72,470 68,000 66,000 30-set-09 30-set
Slide 17: Ebitda: + 6.9% and Ebitda Margin: 71.4%
Ebitda: + 6.9% and Ebitda Margin: 71.4% EBITDA e EBITDA MARGIN (€ mn) EBITDA TREND (€ mn) 71.39% 66.84% 317 28 961 2,542 56,136 59,984 56,136 59,984 Ebitda 30/09/09 Change in Change in Change in Change in Ebitda 30/09/10 30/09/09 30/09/10 revenues inventories Direct Costs G&A DIRECT COST (€ mn) G &
Slide 18: Financial Highlights
Financial Highlights Total market value portfolio 1,776,860 €/000 Gearing ratio 1.35x LTV 57.26% Hedging level 67.58% (on long term debt + bond) November 2010
Slide 19: Reclassified Balance Sheet and Gearing ratio
Reclassified Balance Sheet and Gearing ratio €/000 Sources/use of funds 30/06/2010 30/09/2010 ∆ ∆% Fixed Assets 1,772,567 1,782,336 9,769 0.55% NWC 78,519 76,599 -1,920 -2.45% Other long term liabilities -79,077 -80,225 -1,148 1.45% TOTAL USE OF FUNDS 1,772,009 1,778,710 6,701 0.38% Net Debt 1,023,0
Slide 20: Net Debt
Net Debt NET DEBT COMPOSITION (€/000) 13,728 29,643 847,573 1,021,055 51,944 137,453 Short term debt Current share of long Long term debt Options value Cash & cash Net Debt 30/09/10 term debt equivalents NET DEBT CHANGE (€/000) 8,597 473 1,920 1,104 10,198 67 1,021,055 1,023,018 November 2010 Net De
Slide 21: Finance
21 Finance Below the peak gearing of 1.5X GEARING (D/E) = 1.35x Well below the breach level of any covenants Below the 60% limit LTV = 57.26% LT debt weight = 83.01% BALANCE CAPITAL STRUCTURE LT debt duration = 12 years LOW COST OF DEBT Average cost of debt: 3.6% STABLE LEVEL OF HEDGING At 30/09/201
Slide 22: Financial remarks
Financial remarks 22 30.06.2010 30.09.2010 LTV 57.18% 57.26% % HEDGING ON MORTGAGES+BOND 67.89% 67.58%* % HEDGING ON MORTGAGES 55.42% 54.78%** AVERAGE COST OF DEBT 3.54% 3.60% FIXED COST OF MORTGAGES 4.17% 4.18% BANKING CONFIDENCE 327,500 €/000 327,500 €/000 BANKING CONFIDENCE AVAILABLE 156,000 €/00
Slide 23: Funds From Operations
Funds From Operations €/000 Funds from Operations 30/09/09 30/09/10 ∆ ∆% Pre-tax profit 16,974 25,612 8,638 50.89% Depreciation 633 657 24 3.83% Devaluation 3,883 2,907 -976 Change in FV 8,376 4,414 -3,962 -47.30% Income tax for the period -1,989 -1,727 262 -13.17% FFO 27,877 31,863 3,986 14.30% 35,
Slide 24: Agenda
24 Agenda COMPANY PROFILE 2010 3Q Results REVIEW OF THE 2009-2013 BUSINESS PLAN November 2010
Slide 25: Why a strategic review instead of a 2010-2014 plan?
25 Why a strategic review instead of a 2010-2014 plan? WHAT WE NEED TO UPDATE REASONS FOR KEEPING A 2013 TIME HORIZON In 2010 we faced an operating environment much harder than expected Consumption scenario uncertainty In Romania a deep fall in consumptions while restructuring tenants’ portfolio gen
Slide 26: Targets
26 Targets Despite a 2010 harder-than-expected operating environment and a still uncertain macroeconomic outlook, we confirm the previous strategic guidelines and leave the targets substantially unchanged ITEM 2009-2013 BP REVIEWED TARGETS TARGETS INVESTMENTS (cash out) 750 mn € 750 mn € + 100 mn €
Slide 27: Assumptions - Italy
27 Assumptions - Italy 2010 2011 2012 2013 CPI forecasts are on average 0.3 bp higher vs. one year ago CPI +1.5% +1.6% +1.6% +1.8% * Source: IGD elaborations on Prometeia and IFM forecasts 2010 2011 2012 Consumptions’ recovery Consumption recovery expected expected toto remain sluggish CONSUMPTIONS*
Slide 28: Assumptions - Romania
28 Assumptions - Romania 2010 2011 2012 2013 CPI +5.9% +5.2% +3.0% +3.0% Source: IMF Winmarkt contracts are euro-linked; the business plan model therefore does not consider Romanian CPI forecasts. €/Ron 4.20 4.20 4.20 4.20 Source: Winmarkt-IGD elaborations Consumptions The macroeconomic outlook rema
Slide 29: Retail property market in Italy – 1/2
29 Retail property market in Italy – 1/2 Investments in Italian real estate sector •Source: Jones Lang LaSalle, October 2010 Key findings by J.L.LaSalle research: Investments in Italian real estate sector increased in 2010, giving a substantial stability in tenants’ sales. Performances of shopping c
Slide 30: Retail Property Market in Italy – 2/2
30 Retail Property Market in Italy – 2/2 FAIR VALUE EVOLUTION EXPECTED 2009 2010 2011 2012 2013 Caution Moderate optimism 9Focus on committed pipeline 9New investment opportunities 9Re-qualify existing portfolio Stable LFL rental revenues Moderate growth in rental revenues Flat rent growth expected
Slide 31: Retail Property Market in Romania
31 Retail Property Market in Romania Real Estate Investments (mn €) Encouraging signals from the real estate market in Romania: 87% of total volumes of 2010 transactions represented by retail assets (mainly shopping centres and retail warehouses) In H1 2010, with a record level of retail investments
Slide 32: Investment strategy – main drivers and changes
32 Investment strategy – main drivers and changes Pipeline confirmed both in terms of new investments EXECUTION OF PREVIOUS PIPELINE CONFIRMED and of extensions/re-stylings The cancelled investment in Gorizia to be replaced by a similar investment For the first time in IGD history, the investement p
Slide 33: Investments – Timetable and amounts
33 Investments – Timetable and amounts Investment cash-out Previous 2009 2010 2011 2012 2013 Amount Total amount (mn euro) years in the Plan invested 1 GUIDONIA 90 118.5 2 CATANIA GALLERY 14.4 59.0 3 CATANIA HYPERMARKET 39.5 39.5 4 FAENZA 85.3 85.3 5 ASTI 5.1 45.0 6 VIBO VALENTIA 30.0 30.0 7 PALERMO
Slide 34: Investments by asset class
34 Investments by asset class November 2010
Slide 35: Disposals
35 Disposals We expect some 160 mn € of proceeds from disposals over the 2009-2013 period (they were 60-70 mn € in the previous 2009-2013 BP) DISPOSAL OF A 20% STAKE IN PORTA MEDICEA Completed Completed in in 2010 2010 for for 13.2 13.2 mn mn € € (book value was 12 mn €) Postponed from 2011 to the t
Slide 36: Commercial strategy – Guidelines
36 Commercial strategy – Guidelines Proactive merchandising and tenants’ mix Strong food anchors Presence of strong food anchors provides shopping centres with higher resiliency in footfalls and sales in a critical consumption scenario New attractive brands Continuous research of new brands, favouri
Slide 37: A good starting point
37 A good starting point Tenant quality and mix is key to ensure high occupancy rates and visibility of rents. Sizeable weight of hypermarkets We already enjoy a favourable structure Well-diversified and high-profile tenant 54% of contracts expire beyond mix in our galleries 2013 Top 10 tenants in g
Slide 38: New commercial initiatives
38 New commercial initiatives OPTIMIZING MARKETING Launch of a project for a central co-ordination of marketing plans of PLANS shopping malls: 9Focus on cultural, social and sport initiatives 9Attention to local issues and flavour Transfer of best practices Economies in repeating successful events i
Slide 39: Romania still enhancing consolidated EBITDA margin
39 Romania still enhancing consolidated EBITDA margin STRENGTHS CONFIRMED 9EBITDA margin remains well above Group average IN A HARD ENVIRONMENT 9Downtown locations provide strong resilience to asset market value Prompt reaction to a deep fall in consumptions In 2009 and in H1 2010, in the midst of t
Slide 40: Romania – Focus on commercial strategy
40 Romania – Focus on commercial strategy 9Expand merchandising offer: introduce neighbourhood supermarkets 9Enhance presence of domestic and international retail chain stores 9Starting from 2011, introduce international apparel brands and personal care offer INDICATORS OF PORTFOLIO CONSOLIDATION UN
Slide 41: Romania – Focus on occupancy optimisation actions
41 Romania – Focus on occupancy optimisation actions At Winmarkt occupancy Differently from the Italian assets, in the Winmarkt portfolio the GLA is not a fixed is more flexible than in figure: it can change since we can shape areas on the back of tenants’ specific the Italian portfolio needs (no wa
Slide 42: Romania - Cost efficiency
42 Romania - Cost efficiency STRUCTURE COSTS Costs reduced through more effective organisation: 9Enhancing the quality of marketing team 9Cutting consultancy fees 9Reducing fringe benefits to top management ENERGY COSTS All Winmarkt electric energy contracts now with 1 domestic operators, chosen thr
Slide 43: Human Resources
43 Human Resources Headcount number stabilising over time Avg. age of headcounts: 39 years Graduated: 65% 2010-2013 PERIOD + 12 staff units in Italy (of which 6 at head office) Limited perspective headcount growth - 16 staff units in Romania, mainly linked to paving the way to disposals EBITDA margi
Slide 44: Finance strategy
44 Finance strategy Peak gearing of 1.5 unchanged, even though 2011 PEAK GEARING (D/E) = 1.5 x gearing should be lower Previous target was 65% KEEP LTV < 60% Presently LT debt weight is 83.3% KEEP CAPITAL STRUCTURE BALANCED LT debt duration = 12 y NEW CONVERTIBLE BOND CONDITIONS Lengthening of the e
Slide 45: Further growth options
45 Further growth options The review of the 2009-2013 business plan does not include any M&A activity but: AGGREGATION CRITERIA CONFIRMED AGGREGATING RETAIL – A 6.3-6.5% yield, in line with IGD’s one PROPERTY PORTFOLIOS remains a growth option – D/E < to the IGD’s gearing ratio – Contribution value:
Slide 46: Final remarks
46 Final remarks STRATEGIC Strategy and target continuity despite 2010 was GUIDELINES harder-than-expected CONFIRMED PROMPT Adaptive approach to investments and commercial REACTION TO strategy in order to face the negative impact of CRISIS consumption weakness FOCUS ON In spite of a more cautious ou
Slide 47: Contacts
47 Contacts IGD Immobiliare Grande Distribuzione SIIQ SpA www.gruppoigd.it IR TEAM Claudia Contarini, IR T. +39 051 509213 M. +39 3386211738 claudia.contarini@gruppoigd.it Elisa Zanicheli, Assistant T. +39 051 509242 elisa.zanicheli@gruppoigd.it November 2010